Check fraud is a major source of loss to financial institutions and businesses. In one typical scenario, a fraudster writes a check for an amount of money that is greater than an amount of money that is in an account against which the check is drawn. In another typical scenario, a fraudster forges a check made out to herself or himself. The fraudster then goes to a branch of the financial institution (i.e., a point-of-transaction) and attempts to obtain cash for the check. If the branch dispenses cash to the fraudster, the financial institution may be unable to recover this money.
To thwart check fraud, many financial institutions have required non-customers or customers without identification to impress their fingerprints on the checks before providing cash. To accomplish this, the person attempting to cash the check would press his or her finger into an ink pad and then press his or her finger onto the check. After the person applied his or her fingerprint to the check, a bank cashier would digitally scan the check and provide cash. Initially, such fingerprinting deterred fraudsters. However, fraudsters eventually realized that the fingerprints were not actually checked. Consequently, the deterrence value of fingerprinting potential fraudsters has decreased over time.